GetFit produces two types of exercise treadmills: Regular and Deluxe. The exercise craze and related demand is such that GetFit could use all of its available machine hours producing either model. The two models are processed through the same production department.

	A	B	C
1		Per Unit
2		Deluxe	Regular
3	Sale price	$990	$530
4	Less expenses:
5	Direct materials	300	160
6	Direct labor	94	188
7	Variable manufacturing overhead	270	90
8	Fixed manufacturing overhead*	132	44
9	Variable operating expenses	113	57
10	Total expenses	$909	$539
11	Operating income	$81	$(9)

*Allocated on the basis of machine hours

What product mix will maximize operating income?

(Hint:

Use the allocation of fixed manufacturing overhead to determine the proportion of machine hours used by each product.)

Prepare the product mix analysis.

GetFit
Product Mix Analysis
	Deluxe	Regular